Apple Inc and four record labels are working on a plan to increase digital sales of albums, while the computer maker is also separately developing a tablet-sized device, the Financial Times reported on Sunday.

Apple is working with EMI, Sony Music, Warner Music and Vivendi's Universal Music Group on the project, Cocktail, with the sides hoping for a launch in September, the paper reported, citing unnamed sources.

The project with the record companies aims to offer interactive features with music downloads, the paper said.

Apple also hopes to offer the tablet-sized computer in time for Christmas shopping, the FT reported.

The computer will connect to the Internet like Apple's iPod Touch and its screen may be up to 10 inches diagonally, the paper reported.

The paper said book publishers have also been in talks with the computer maker about offering their services on the new device, which could compete with Amazon's Kindle.

Apple and the music companies were not immediately available for comment.

(Reporting by Paritosh Bansal; Editing by Christian Wiessner)

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